Though Dhiraagu is the first Maldivian telecommunications company, it's not the first to start the service. Telecommunication service in the Maldives was officially started on December 23, 1943, by the Maldivian government. On May 17, 1977 Cable and Wireless started its operations as the telecom provider. Later, in 1988, Cable and Wireless and the government of the Maldives formed a joint venture company, Dhiraagu, making it the first ever Maldivian telecommunication company. The Maldivian government holds 48% share of the company and 52% is owned by Cable & Wireless

On September 18, 2005 Dhiraagu signed an agreement with Sri Lanka Telecom for an Optical Submarine Cable System. Under the agreement, both companies will invest in maintaining the cable. The actual work of laying the 837 km cable was done by NEC of Japan, under a contract valued at US$ 22.7 Million.[1] On November 14, 2006 the cable was connected to a landing site at Hulhumale', Maldives.[2] This Tier 2 network has an initial transmission capacity of 3 Giga bit per second (Gbit/s), which is capable of being increased to up to 160 Gbit/s. The system adopts WDM, or Wavelength Division Multiplexing. This is the second submarine cable connecting Maldives to the world.[3]

Original logo. This logo was replaced by their current logo on June 23, 2005.

Dhiraagu stated that this cable will help the company to reduce the cost of providing Telephone and Internet services, thus reducing prices. Also the cable system will help to improve quality of services.

Dhiraagu has long been seen to Monopolise the telecoms market in the Maldives, a situation it is accused of having created and maintained. Until 2004 the Telecommunications Authority of Maldives had refrained from issuing additional licenses to companies preventing any competition to all of the telecom services provided by Dhiraagu. This status quo may have been deliberately retained by the Maldivian government in an effort to profit from Dhiraagu's revenues, as it partly owns the company.

Dhiraagu was also heavily criticized for what the public describes as absurdly high prices during the 1980s and 1990s. Foreseeing competition and regular criticism from the public, the company had dramatically lowered the service prices.